Another Scots agency linked to £2bn Azeri slush fund

More than £53 million of mystery money has been laundered from an oil-rich former Soviet republic through a shell firm based at one of Scotland’s longest-established company formation agencies, investigators claim.

The business was one of 20 Scottish limited partnerships (SLPs) named in an investigation into the elaborate and far-reaching £2.2 billion Azerbaijan Laundromat money-laundering scheme.The firm, called Rasmus, received some $70m in payments fed through the Laundromat, according to an international journalistic investigation sending shock waves through Europe.

It took receipt of the cash, nominally for equipment deliveries, in the course of just 18 months while registered at the Edinburgh base of Jordans Scotland, a specialist corporate law services firm that can trace its roots back to Victorian times.

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There is no suggestion Jordans Scotland, which was rebranded from its historic name Oswalds in 2014, had any knowledge of Rasmus’s activities or links to the former Soviet republic.

There is growing concern those close to the authoritarian regime of Azerbaijani President Ilham Aliyev used the Laundromat as a slush fund to pay off western politicians.

The government of Azerbaijan has dismissed the allegations as a “scandalous” smear campaign orchestrated by enemies, including in the neighbouring country of Armenia.

The two countries have a troubled relationship, particularly over the disputed area of Nagorno-Karabakh, which has led to clashes in the past.

Baku, the Azerbaijani capital

Duncan Hames, of Transparency International, stressed real people suffered from laundering of this kind.

He said: “Knowing UK-registered companies were at the heart of a scheme that saw $2.9bn stolen from Azerbaijan underlines just how damaging it is to be complicit in global corruption.”

The Rasmus payments – and $2bn more – were revealed as a journalist group called the Organised Crime and Corruption Reporting Project (OCCRP) published 16,000 bank transactions previously leaked to the Danish newspaper Berlingske.

The historic data dump has already exposed that two SLPs, Glasgow-based Hilux Services and Polux Management, and two English firms made up a core that distributed the cash from Azerbaijan.

Raw data analysed by The Herald shows 83 transactions from the two core firms to Rasmus between June 2013 and December 2014.

It cannot be assumed, warn OCCRP, that all transactions in the Laundromat are suspicious.

Rasmus has never filed any accounts and has never revealed its true owners. The now dissolved SLP was formally held by two firms registered in the British Virgin Islands.

Rasmus was wound up in April 2016, more than a year before the UK Government imposed emergency transparency rules on SLPs after a series of revelations by The Herald around their abuse by criminals, especially in the former Soviet Union.

The Herald reported yesterday most of the 20 SLPs in the Azerbaijan Laundromat were registered at addresses that have featured in previous scandals, including the 10-times-bigger Russian Laundromat exposed earlier this year. These included a number of private homes and mailbox and virtual offices in Glasgow and Edinburgh.

Rasmus itself was initially registered at a small private home in Bishopbriggs, near Glasgow. It moved to Oswalds, now Jordans Scotland, in June 2013 shortly after the first payments from the Laundromat were made.

The Herald asked Jordans to comment but we have received no response.

The agency’s Edinburgh division is led by director Andrew Cockburn. Mr Cockburn is an active member of the Institute of Directors and past president of the Edinburgh City Business Club.

Jordans Scotland’s sister firm Jordan Trust Company offers UK and offshore company registrations, including in Russian, to an international market.

Analysis by David Leask: Contagion threat from Baku billions pouring through Scottish firms

Baku has always felt like the crossroads of Europe and Asia, a city, rather like Istanbul in Turkey, that somehow bridges two worlds.

Ultra-modern glass and steel skyscrapers now punctuate
the skyline of the Azerbaijan’s ancient capital, thanks to its second great oil boom in just a century.

The new buildings – five-star hotels and glitzy malls – represent the regime of Ilham Aliyev just as ostentatious Communist buildings did for his father, Heydar, Soviet leader Leonid Brezhnev’s strongman in the Caucasus.

Aliyev senior, a former KGB man, ran Azerbaijan for most of 1969 to 2003. He was only out of power for six years after Pravda, the paper of the Communist party, accused him of corruption and he fell foul of the first and only Soviet president, Mikhail Gorbachev.

His son has had a similarly bad press, thought not usually at home, for the same reasons.

Mr Aliyev – his name is sometimes transcribed in to English as Aliev – was named as “Corrupt Person of the Year” by campaigners in 2013.

Reporters without Borders, the freedom of speech group, this year ranked his country as one of the worst in its world press freedom index.

It said: “Discontent with crushing all forms of pluralism, President Aliyev has been waging a relentless war against his remaining critics since 2014.

“Independent journalists and bloggers are thrown in prison if they do not first yield to harassment, beatings, blackmail, or bribes.”

Aliyev regime sources have therefore dismissed the Azerbaijan Laundromat story as a “smear”. In a clear dogwhistle to borderline anti-Semites, it suggested the evidence brought against it was the product of the Jewish American billionaire George Soros, who is something of a bogeyman for some former Soviet regimes.

Mr Soros invests heavily in independent journalism and civic society programmes and funded one of the bodies behind the Laundromat, the Organised Crime and Corruption Reporting Project.

Baku's transformed skyline

Media close to the Azerbaijani regime immediately assaulted both the OCCRP – whose raw data has formed the basis for The Herald’s series of reports – and The Guardian.

And they clearly tried to tap in to the same anti-media sentiment in the US, encouraged by President Donald Trump, who also happens to be behind one of the new Baku skyscrapers thanks to a deal with an Azeri named in the Laundromat.

“Freedom of the press in the West is illusory,” said Day Az, the country’s first web newspaper. “This is confirmed by a crisis of trust in the mainstream media in Britain itself.” The paper called OCCRP, whose website has been blocked in Azerbaijan, “the lapdogs of Soros”.

Also to blame for the stories, said Azeri sources, were the Armenians. Azerbaijan fought a bloody war with its neighbours over a territorial dispute which has still not been resolved.

Oh, and MI6.

Europe is watching with concern. Money from the Laundromat, say investigators, was used to make payments to Western politicians sympathetic to Azerbaijan as Mr Aliyev plots a careful diplomatic course between Russia, the EU and Middle Eastern neighbours.

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